Bitcoin Forum
December 11, 2016, 02:32:40 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: Bitcoin ownership obeys a power law - BTC price prediction thru to July 2013  (Read 2185 times)
jim618
Legendary
*
Offline Offline

Activity: 1708



View Profile WWW
July 02, 2011, 03:00:05 PM
 #1

Hello Everybody,

I noticed today that the current distribution of bitcoins obeys a power law (http://en.wikipedia.org/wiki/Power_law).
If you draw it on a log-log graph then you get a nice straight line.

With a bit of whimsy, I have extrapolated what this graph will look like in a year from now (July 2012) and in two years time (July 2013) to predict the future price of bitcoins !

Here is the distribution of bitcoin I use initially:

1 x Satoshi owns 2,000,000 BTC    
10 x "2010 Early geeks" own 200,000 BTC each
100 x "2010 Late geeks" own 20,000 BTC each
1000 x "2011 Q1 Early adopters" own 200 BTC each
10,000 x "2011 Q2 Early adopters" own 20 BTC each
100,000 x "2011 July Dabblers" own 3 BTC each

This distribution roughly matches the price and numbers available of BTC since its creation - it is an educated guess really

Here is what the current distribution looks like:
http://jdigi.net/powerLaw/bitcoin%202011%20July.png
(2011 July  |  bitcoin at USD 20 = 1 BTC  |  100,000 bitcoin users)

If you extrapolate the straight line for a year you get this graph:
http://jdigi.net/powerLaw/bitcoin%202012%20July.png
(2012 July  |  bitcoin at USD 100 = 1 BTC  |  600,000 bitcoin users)

And then push it out another year you get this:
http://jdigi.net/powerLaw/bitcoin%202013%20July.png
(2013 July  |  bitcoin at USD 1000 = 1 BTC  |  5,600,000 bitcoin users)

I have put the Open Office spreadsheet I used to make these graphs at:
http://jdigi.net/powerLaw/bitcoin%20power%20law.ods
if you want to have a play.

:-)

Jim

p.s. Do you own due diligence, this is not financial advice, etc, etc

MultiBit HD   Lightweight desktop client.                    Bitcoin Solutions Ltd   Bespoke software. Consultancy.
1481423560
Hero Member
*
Offline Offline

Posts: 1481423560

View Profile Personal Message (Offline)

Ignore
1481423560
Reply with quote  #2

1481423560
Report to moderator
1481423560
Hero Member
*
Offline Offline

Posts: 1481423560

View Profile Personal Message (Offline)

Ignore
1481423560
Reply with quote  #2

1481423560
Report to moderator
1481423560
Hero Member
*
Offline Offline

Posts: 1481423560

View Profile Personal Message (Offline)

Ignore
1481423560
Reply with quote  #2

1481423560
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481423560
Hero Member
*
Offline Offline

Posts: 1481423560

View Profile Personal Message (Offline)

Ignore
1481423560
Reply with quote  #2

1481423560
Report to moderator
1481423560
Hero Member
*
Offline Offline

Posts: 1481423560

View Profile Personal Message (Offline)

Ignore
1481423560
Reply with quote  #2

1481423560
Report to moderator
jim618
Legendary
*
Offline Offline

Activity: 1708



View Profile WWW
July 02, 2011, 05:40:09 PM
 #2

Using the same model, you can work out how many bitcoin millionaires there are now, and will be in July 2012 and July 2013.

It is one of those 'area under the curves' problems but it is easier if I show you:
Here is the number of people with one million USD or more in bitcoin as of now:

http://jdigi.net/powerLaw/bitcoin%20millionaires%202011%20July.png
(July 2011  |  50 USD millionaires)

Here is the same graph for the July 2012 projection:
http://jdigi.net/powerLaw/bitcoin%20millionaires%202012%20July.png
(July 2012  |  120 USD millionaires)

And here is what it looks like in July 2013:
http://jdigi.net/powerLaw/bitcoin%20millionaires%202013%20July.png
(July 2013  |  500 USD millionaires)

In the last graph, notice that Satoshi has become the first bitcoin USD billionaire.
Congratulations Satoshi Nakamoto !


MultiBit HD   Lightweight desktop client.                    Bitcoin Solutions Ltd   Bespoke software. Consultancy.
drakahn
Hero Member
*****
Offline Offline

Activity: 504



View Profile
July 08, 2012, 07:21:29 PM
 #3

Hello Everybody,

I noticed today that the current distribution of bitcoins obeys a power law (http://en.wikipedia.org/wiki/Power_law).
If you draw it on a log-log graph then you get a nice straight line.

With a bit of whimsy, I have extrapolated what this graph will look like in a year from now (July 2012) and in two years time (July 2013) to predict the future price of bitcoins !

Here is the distribution of bitcoin I use initially:

1 x Satoshi owns 2,000,000 BTC     
10 x "2010 Early geeks" own 200,000 BTC each
100 x "2010 Late geeks" own 20,000 BTC each
1000 x "2011 Q1 Early adopters" own 200 BTC each
10,000 x "2011 Q2 Early adopters" own 20 BTC each
100,000 x "2011 July Dabblers" own 3 BTC each

This distribution roughly matches the price and numbers available of BTC since its creation - it is an educated guess really

Here is what the current distribution looks like:
http://jdigi.net/powerLaw/bitcoin%202011%20July.png
(2011 July  |  bitcoin at USD 20 = 1 BTC  |  100,000 bitcoin users)

If you extrapolate the straight line for a year you get this graph:
http://jdigi.net/powerLaw/bitcoin%202012%20July.png
(2012 July  |  bitcoin at USD 100 = 1 BTC  |  600,000 bitcoin users)

And then push it out another year you get this:
http://jdigi.net/powerLaw/bitcoin%202013%20July.png
(2013 July  |  bitcoin at USD 1000 = 1 BTC  |  5,600,000 bitcoin users)

I have put the Open Office spreadsheet I used to make these graphs at:
http://jdigi.net/powerLaw/bitcoin%20power%20law.ods
if you want to have a play.

:-)

Jim

p.s. Do you own due diligence, this is not financial advice, etc, etc

That'd be nice

14ga8dJ6NGpiwQkNTXg7KzwozasfaXNfEU
cst
Member
**
Offline Offline

Activity: 115

The Cosmos doesn't care about you.


View Profile
July 08, 2012, 09:15:32 PM
 #4

your links don't work

Probably because the OP is 1 year old... Too bad he was wrong on the price Wink
Gliss
Sr. Member
****
Offline Offline

Activity: 257


View Profile WWW
July 08, 2012, 10:48:14 PM
 #5

Hey now, there's still a couple weeks left for his July 2012 prediction.  Roll Eyes

Crypto-currency market cap rankings @ http://coinmarketcap.com
DannyHamilton
Legendary
*
Offline Offline

Activity: 1638



View Profile
July 09, 2012, 02:58:05 AM
 #6

. . .If you extrapolate the straight line for a year you get this graph. . .
. . .Too bad he was wrong on the price. . .

Yes, when making financial decisions, it is important to always remember that "Past performance is no guarantee of future results."

The quality of posts has dropped to such a low level that all users who are participating in a paid signature campaign are added to my ignore list. If you'd like a copy of the list to improve your browsing experience, you can find it here: https://bitcointalk.org/index.php?topic=973843.0 (Updated 2016-1-4)
jim618
Legendary
*
Offline Offline

Activity: 1708



View Profile WWW
July 09, 2012, 09:53:28 PM
 #7

I have put the links back (I was using that domain for something else).

Yes - a pity that prediction did not quite work out !!

:-)

MultiBit HD   Lightweight desktop client.                    Bitcoin Solutions Ltd   Bespoke software. Consultancy.
Raize
Donator
Legendary
*
Offline Offline

Activity: 1375


View Profile
July 10, 2012, 05:02:58 AM
 #8

Quote
1 x Satoshi owns 2,000,000 BTC    
10 x "2010 Early geeks" own 200,000 BTC each
100 x "2010 Late geeks" own 20,000 BTC each
1000 x "2011 Q1 Early adopters" own 200 BTC each
10,000 x "2011 Q2 Early adopters" own 20 BTC each
100,000 x "2011 July Dabblers" own 3 BTC each

I don't think any one person owns more than 1 million BTC, including Satoshi. I could be wrong on this, of course, but given that we saw it hit $30 and then saw ~200,000 Bitcoins enter the market, I have to guess the most anyone owns is actually more around 200,000 Bitcoins (obviously there is a wallet with 400,000+, but I would disagree that *one* person owns that amount).

Specifically I would take issue with this one:
Quote
1000 x "2011 Q1 Early adopters" own 200 BTC each

That's exactly when I got involved, and I own significantly more than 200 BTC. So too do most of the first 1,000 early adopters you describe. I think there are still a handful of people that, if they chose to do so, could drive the price to $5 if they wanted to sell on MtGox right now. I do think the number of people that can do that (owning 100,000 BTC or more) is under 10, including groups/entities, but it's something to think about or consider when purchasing.

I also think you maybe overestimate the numbers on your latter two categories. But that's just my guess. This is still a pretty reasonable approach to take when doing estimates, though, I just think you've got the scale off a little bit.

OrganofCorti's Neighbourhood Pool Watch - The most informative website on blockchain health
FreeMoney
Legendary
*
Offline Offline

Activity: 1246


Strength in numbers


View Profile WWW
July 10, 2012, 05:48:30 AM
 #9

I think you missed the 2000BTC crowd.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!